1. Prof. Dr. Wolfgang Georg Arlt FRGS FRAS
March 12th, 2018
Las Palmas, Spain
Implications from the Latest figures: New Directions in the Chinese Outbound Market
Prof. Dr. Wolfgang Georg Arlt FRGS FRAS
COTRI China Outbound Tourism Research Institute

2. Introduction of COTRI
“COTRI is the world’s leading institute for research and consulting services related to the Chinese outbound tourism market, and cooperates with all leading international and Chinese tourism organisations.” (China Daily, March 2016) COTRI offers services around to customers around the world since 2004 as an independent institute research and consulting, led by Prof. Dr. Wolfgang Georg Arlt FRGS FRAS. Offices are located in Hamburg/Germany and Beijing/China, with a global network of regional partners on all continents.
COTRI IN GERMANY
COTRI China Outbound Tourism Research Institute
West India House Eiffestraße 68
D Hamburg
COTRI IN CHINA
COTRI China Office
21th Fl, Wangjing Greenland Center B Hongtai East Street, Chaoyang District
Beijing
2018

3. COTRI’s founder and director
First visit to People’s Republic of China in 1978
owner of Inbound Tour Operator China -> Europe with offices in Beijing and Berlin
Since 2004 COTRI founder and director
Professor for International Tourism Management at West Coast University of Applied Sciences Germany (Heide)
Visiting professor at universities in China, United Kingdom and New Zealand
Fellow Royal Geographical Society (London)
Fellow Royal Asiatic Society (London)
Research Fellow Japanese Society for the Promotion of Science (Tokyo)
Board member PATA Pacific Asia Travel Association (Bangkok)
Vice President Western Europe ITSA International Tourism Studies Association (Beijing/Greenwich)
Fellow of International Association of China Tourism Studies (Guangzhou)
Member of UNWTO Expert Panel (Madrid)
Prof. Dr. Wolfgang Georg Arlt FRGS FRAS
2018

4. China’s outbound tourism 2018
Greater China (Hong Kong, Macau, Taiwan) continues to lose market share. The Rest of the World in 2017 still saw double-digit YoY growth rates.
2018

5. Chinese outbound tourism to Spain
Mainland Chinese citizens arrivals in SPAIN (Source: COTRI)
QUARTER
ARRIVALS 2011
ARRIVALS 2012
ARRIVALS 2013
ARRIVALS 2014
ARRIVALS 2015
ARRIVALS 2016
ARRIVALS 2017
1st QUARTER
21,925
26,720
40,400
50,711
82,493
67,464
89,114
2nd QUARTER
44,857
41,191
50,647
67,300
117,841
75,701
146,261
3rd QUARTER
22,341
53,430
82,414
84,982
136,024
131,818
173,754
4th QUARTER
25,146
55,758
78,638
84,856
60,776
99,604
104,596
2018

6. Chinese outbound tourism to Spain
Source: COTRI
2018

7. Three main drivers for China’s outbound tourism in 2018: 1
Three main drivers for China’s outbound tourism in 2018: 1. Visa and connectivity
Visa free entry:
Simplified visa procedures
27 destinations offer visa-free entry for Chinese citizens
39 destinations offer visa on arrival or E-Visa
for Chinese citizens
Asia
UAE
Jeju Province, South Korea
Indonesia
Quang Ninh Province, Vietnam
 North America
Barbados
Bahamas
Grenada
Antigua and Barbuda
Dominica
Haiti
Saint Kitts and Nevis
Turks and Caicos Islands
Jamaica
South America
Ecuador
Europe
Serbia
San Marino
Oceania
Fiji
Tonga
French Polynesia
Northern Mariana Islands
Samoa
Africa
Mauritius
Seychelles
Réunion
Morocco
Tunisia
Antarctic
South Georgia and the South Sandwich Islands
2018

8. Three main drivers for China’s outbound tourism in 2018: 1
Three main drivers for China’s outbound tourism in 2018: 1. Visa and connectivity
More direct flight connections
In 2017 more than 100 new air connections were started, with more in the pipeline for 2018, mostly connecting second tier airports in China and abroad.
2018

9. Three main drivers for China’s outbound tourism in 2018: 1
Three main drivers for China’s outbound tourism in 2018: 1. Visa and connectivity
2018

10. Three main drivers for China’s outbound tourism in 2018: 2. Information
More information available
Most global destinations have intensified their provision of information to both Chinese outbound tour operators and to potential FIT visitors, using fairs like the new ITB China or Social Media in the form of WeChat channels entries, online trainings, and increasingly videos.
With each year of Chinese travellers visiting more diverse destinations the chance is getting bigger for potential travellers to know somebody (in real life or online) who already visited a specific destination and can give advise, making it easier to to organize a trip without the help of a tour operator.
IT and AI provide increasingly sophisticated tools to receive customized information before and during the trip.
2018

11. Three main drivers for China’s outbound tourism in 2018:
2. Information
Digital travel sales share in China: PC vs. Mobile
Market Share of Chinese OTAs (by Vacation Products Booking)
2017

12. Three main drivers for China’s outbound tourism in 2018: 2. Information
More information available – Mobile for everything including payment
2018

13. Three main drivers for China’s outbound tourism in 2018: 3
Three main drivers for China’s outbound tourism in 2018: 3. From Quantity to Quality
Moving from Quantity to Quality
“Be careful what you wish for”: Many destination find themselves in a situation of being visited by large numbers of Chinese mass-market package tour groups, which boost the arrival numbers but stay only for a short period of time at a destination (concentrating on the most famous destinations and sights during high season) and create very limited yields.
With the growing importance of independent Chinese travellers (FITs), quality and value for money take the place of quantity and cheap price.
Chinese individual travellers are tiring of travelling overseas and meeting mostly fellow countrymen in a destination, of shopping and sightseeing. They become more and more interested in new, authentic offers based on local culture and nature if provided and communicated in the right way.
2018

14. “The” Chinese Outbound Traveller does not exist
Diversification of demand and behaviour
“The” Chinese tourists does not exist (anymore).
The mass-market package tours frantically rushing around ticking off main sights with a selfie are still existing with 100+ million Chinese still waiting for their first trip abroad.
However, the interest of many more experienced Chinese tourists are changing, after the first phase of sightseeing tours they now look for experiences and immersion during customised or self- organised trips.
The destinations visited by Chinese outbound travellers are changing from “must-see” destinations to discovering new places, instead of postcard confirmation the more experienced travellers look for authenticity, following their own interests to visit mountain, clean natural spaces, culture activities, wineries or farms. .
2018

15. “The” Chinese Outbound Traveller does not exist
Group vs. FIT is not a simple “either-or” but a sliding scale
On the one end are old-fashioned package tours “All famous sights in 5 days” mainly done for the “me in front of…” selfie, on the other end are fully autonomous backpackers
In between are all kind of ‘semi-self-organized’ packages, customised or bespoken tours with varying degrees of flexibility and in-build modules:
Modular Travellers (COTRI) buying
Fragmented Products (Ctrip) from Online Travel Agencies (OTAs),
ranging from entrance tickets to organised themed tours. .
2018

16. “The” Chinese Outbound Traveller does not exist
Chinese “FIT” are different from “Western” FIT, most of them are not on a shoe-string budget, but spend more than group travellers.
Most of them are seekers of prestige and self-affirmation, trying to find themselves abroad. They pursue “serious leisure” activities, choosing the activity, not the destination, first.
FIT Second Wave travellers more open to suggestions, but also more confident and demanding than ever. They can be attracted to new places, new activities, new times of the year, bringing not only more, but a different kind of business.
Still, almost all Chinese travellers are „Money rich, but time Poor“. .
2018

17. “The” Chinese Outbound Traveller does not exist
Less than 10% of Chinese citizens possess passports The majority lives in China’s 1st and 2nd tier cities
30 to 49 years group remains the largest age demographic (50% of total border crossings)
But the younger and senior groups are on the rise
Four Economic Regions As Tourist Source Regions
2018

18. “The” Chinese Outbound Traveller does not exist
More Chinese Outbound travellers (including trips to Greater China) chose to travel individually as opposed to travel with a group in 2016.
Sightseeing and Shopping are still the most important activities at their chosen destinations for Package tourists
For FITs there is growing trend to pursue unique experiences, authenticity, and soft adventures – in short, they wish to:
“to travel and live like locals”
Icon made by  Zlatko Najdenovski from 
Icon made by Freepik from 
Northern Chinese: Sun seekers
Southern Chinese: Sunshine at home
2018

19. Who is travelling? Chinese traveller demographics are changing.
From a majority of middle-aged travellers in the first wave of Chinese outbound tourism, now persons born after 1980 (balinghou’s) and even after 1990 (jiulinghou’s) make up almost 60% of all Chinese international travellers.
Demographics are also becoming more diverse: The first cohorts of affluent 60+ citizens are entering the market, more children (linglinghou’s, born after 2000) accompany their parents or go on school trips.
2016 growth rates for outbound travellers below 18 and above 55 years of age: +90%
Average life expectancy for a person living in China 1960: 43 years / 2016: 76 years.
More than 200 million Chinese citizens are aged 60 and over. Some of them have enough money – or children with enough money – to take part in outbound tourism.
Gender balance: MICE more men than women, leisure more women than men .
2018

20. Who is travelling?
For affluent 1st tier city inhabitants international travel is already fixed part of consumption pattern, mostly travel self-organised or customised tour for fixed group
More and more segmentations into niches including big niches like health tourism, cruises, food and wine, adventure, educational etc.
Second Wave experienced Chinese travellers: Niche topics, themed tours, bespoke arrangements, activity based trips, moving from “money rich but time poor” to “money and experience rich but time poor”
Key motivation to choose destination: Not too many (but not none) Chinese have travelled yet to this place

21. Who is travelling?
Aspiring 2nd and 3rd tier city inhabitants catching up fast, most growth comes from lower tier cities
Older customers starting with package tour, younger travellers move directly to half-/ or self-organised tour
For young families or 6+1 multigenerational groups self-drive / LV gaining importance
More likely to still ticking off the „must-see“ list of destinations and sights
Key motivation to choose destinations: All KOLs and some of my friends have already been there

22. Example: Product Adaptation
Why should Chinese tourists visit the Canary Islands? Because of Sanmao! From this month, a new route has been opened for Chinese travelers in commemoration of late influential writer Sanmao, a female writer from Taiwan who lived on La Palma and Gran Canaria islands between 1976 and 1979, after getting married to a Spaniard. One of Sanmao's most celebrated works is about her love story and adventures with her husband, who died in a diving accident in 1979 in La Palma, where he was later buried. Quero Ruiz's grave as well as the couple's residences on both islands are preserved till today and are open to the public. The sites have attracted a growing number of Chinese tourists in recent years. “There were a lot of Chinese travellers visiting a normal house on our island, and many of them left letters in front of the house.” Ines Jimenez Martin, counselor of tourism of Gran Canaria, said since "millions of Chinese people know the Canary Islands through her book, we want them to be able to relive and experience the life of Sanmao in Gran Canaria."

23. Conclusion: Catering for the Second Wave
Second Wave travellers more open to suggestions, but also more confident and demanding than ever
Second Wave Chinese travellers can be attracted to new places, new activities, new times of the year, bringing not only more, but a different kind of business, helping to mitigate Overtourism
But: To satisfy the Second Wave Chinese travellers needs more preparation and understanding to keep the balance between treating Chinese Second Wave guests as international citizens and still showing respect to the Chinese culture by providing the right kind of reasons to come, the right story to tell and providing the feeling of being more welcomed as Chinese traveller than any other kind of customer
2018

24. China’s outbound tourism – You ain’t seen nothin’ yet
Thank you for your attention!
Looking forward to your comments and questions
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2018